AMD Denies Improperly Giving Sensitive Chip Technology to China

Advanced Micro Devices on Friday denied a report that it had improperly transferred critical microprocessor technology to Chinese partners.

On Thursday, The Wall Street Journalreported that AMD's 2016 joint venture known as Tianjin Haiguang Advanced Technology Investment, or THATIC, allowed a company with ties to the Chinese military to obtain chip technology that could boost China's supercomputer efforts. The story came a week after the U.S. Commerce Department specifically banned AMD's Chinese partners from accessing such U.S. technology, effectively ending the joint venture.

But AMD pushed back on Friday morning, saying that the technology used in the joint venture did not involve its high performance chips and had been approved for sharing by the Commerce Department.

"The Wall Street Journal story contains several factual errors and omissions and does not portray an accurate picture of the joint ventures that AMD entered into with THATIC in early 2016," AMD general counsel Harry Wolin said in the statement. "AMD takes strong exception to characterizations in the story that it did not act properly or transparently in creating the joint ventures."

The newspaper "stands by its reporting," spokeswoman Colleen Schwartz said in response to a request fro comment from Fortune.

The story cited retired Brig. Gen. Robert Spalding, a former staffer on the National Security Council, as saying AMD had shared "the keys to the kingdom" of U.S., microprocessor technology. Spalding left the NSC last year after a controversy over a proposal he wrote, titled "The Eisenhower National Highway System for the Information Age," suggesting a government-led effort was needed to accelerate the arrival of 5G wireless service.

AMD disputed Spalding's characterization of the technology it shared in the joint venture. "AMD received no objections whatsoever from any agency to the formation of the joint ventures or to the transfer of technology – technology which was of lower performance than other commercially available processors," the company said. "In fact, prior to the formation of the joint ventures and the transfer of technology, the Department of Commerce notified AMD that the technology proposed was not restricted or otherwise prohibited from being transferred. Given this clear feedback, AMD moved ahead with the joint ventures."

The story didn't sit well with chip industry consultant and former AMD employee Patrick Moorhead. "Having known AMD for close to 30 years, I will say its legal department is the most conservative and risk-averse I have ever worked with," he noted on Twitter. "EVER. Conservative to a fault, losing opportunities and exasperating marketing VPs, CMOs and CSOs."

AMD's stock price, which has rocketed up 65% this year, was down 1% in midday trading on Friday.